Cologne-based DERECO has added a new purchase to its current private placement for an
associated family office from the Netherlands, a three-star Holiday Inn Express Hotel. The property is located in central Dusseldorf, in the Pempelfort neighbourhood.

The hotel was sold by a project company belonging to INVESTA Immobiliengruppe from Munich.

The multi-wing construction is scheduled for completion by summer 2015. It is being built on a plot in “Am Wehrhahn” approximately 2,000 sqm in size. The modern six-storey business hotel property, part of the InterContinental Hotel Group, will be operated by Berlin-based Foremost, which will lease the entire project over 20 years. Gross floor space will amount to approx. 5,600 sqm, plus the parking lot. In total, the hotel will consist of 164 rooms (approx. 33 sqm each).

In addition, the hotel will be fitted with a modern reception and lobby area, a conference and business centre and a bar and lounge zone. The transaction comes as an asset deal for approx. EUR 18m. Buyers were given legal advice by the law firm Taylor Wessing from Berlin. Technical advice was carried out by IQ Real Estate, Dusseldorf. The selling party received legal advice from Clifford Chance, Frankfurt.

DERECO’s private placement is structured as a “blind pool” open for further acquisitions. At present, DERECO continues to focus on purchasing fully let properties that match high quality standards in the top ten real estate markets in Germany. These purchases could either be completely new constructions offered as forward deals or existing stock no older than two or three years. However, properties in appealing smaller communities with high purchasing power and central functions in the vicinity of the top ten are eligible too. The company exclusively selects real estate in established A1 and B1 locations. Ideally, properties are located in convincing specific microspots in central neighbourhoods.

For the real estate fund, DERECO exclusively considers potential investments in an order of magnitude between EUR 10m and EUR 40m in the retail, housing and office segments, with the ultimate goal of providing for a well-balanced portfolio. Besides single-use constructions, individual investments are an option if they combine different usage functions and if average tenancy contracts last for a period of more than five years. For the time being, DERECO’s investing policy is not geared towards any single-tenant buildings and/or other hotel purchases.